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Portland - Beaverton - Hillsboro - Lake Oswego - Tigard

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The Current Health of the Portland Market

I like to use the Case-Shiller monthly report to examine the health of our market and to examine where we're headed. Based on the most recent report, our looks to be headed in the right direction.

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To examine the market on a monthly basis, one tool we like is the Case-Shiller S&P Index that you can get online. It continues to show us appreciation across the country at a healthy 5%. The report is broken down into 10- and 20-city composites, with Portland in the 20-city composite.

Portland is leading the way in this report. The 20-city composite was actually down slightly in this last report from 5.1% to 5%, but Portland is at 12.4% appreciation. Before you overreact to that, understand that we were even higher than that at one point. We're starting to see it trend down, but that's a good thing.

The report also notes that most analysts are expecting the Fed to raise interest rates this December. Even if they do, though, the impact on mortgage rates and the mortgage industry are going to be so minimal that we'll still see these historically low rates, so there's nothing to get too worried about.

Portland is leading the way.

We also get questions all the time about whether we're in a bubble that's going to pop soon. We're so programmed with bubbles these days that I believe we just overreact. We know we're not in a bubble by looking at outstanding mortgage debt and seeing that we're about 12.6% lower than what it was at its peak in the 1st quarter of 2008, and we're not seeing much growth there.

In the video above, you can see a table that demonstrates how healthy the indexes are compared to the peak of the market in 2006 and the trough of 2012. We're starting to see the market shift, and we need to see the market shift. We're not seeing up to 10 offers on almost everything, and that's a good thing.

If you have any questions at all about where our market is going and what it means to you as a buyer, seller, or homeowner, give me a call or send me an email. I'd love to hear from you!

Why Are Transaction Timelines Longer in the Portland Area?

The average business day turn times for different counties here in Portland are varying to a strange degree. This is because there just aren’t enough appraisers for all the people moving into Portland. 

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Our office recently had a transaction that was supposed to close at the end of September but got postponed by half of a month purely because the appraisal took so long to come in. Why?

Today we’ve invited Peter Wease, our preferred lender from Fairway Independent Mortgage, to talk about turn times for appraisals in the Portland area and how they’re affecting transaction timelines. According to Peter, this type of delay isn’t uncommon. His company has been tracking this type of occurrence for the past year, and they see weekly updates based on different counties.

As you can see in the video above,
on September 18th, Clackamas County’s average business day turn time was almost 21 days. On October 3rd, it increased to 23 days. This is in contrast, however, to Washington County, whose average business day turn time dropped from 28 days on September 18th to 16.5 days on October 23rd.

The appraisers need help.

The primary factor in this kind of drastic variance from county to county is the fact that roughly 111 people are moving to Portland every single day, and there just aren’t enough appraisers to keep up. The best way to change this turn time, then, is to get more help to the appraisers.

Another consequence of this situation is that appraisal fees have soared. Appraisers are getting inundated by other appraisal management companies, so they’re demanding higher fees and being more selective in which appraisals they choose to undertake. Who pays for that increase? The customer. It’s unfortunate, but it’s the truth.

The moral of the story is that, for the time being, it’s going to be hard to close a transaction in just 30 days in the Portland area. You’d be well-advised to prepare for it to take as long as 45 or even 50 days. In addition, let your clients know about what’s going on with these turn times so they can prepare as well.

If you have any other questions for Pete about current mortgage rates, you can call him at 503-267-6391.

As always, if there’s anything else you’d like us to address relative to the mortgage finance aspect of real estate transactions, give me a call or send me an email. I look forward to talking with you soon!

What If the First Home You See Is the One?

If you fall in love with the first home you see, should you buy it? Most Realtors would say yes, but I recommend comparing that home to others on the market. 

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If you fall in love with the first property you see, should you buy it or keep looking at other homes?

Some Realtors will say that if you fall in love with the first home you see, you have entered buyer nirvana. You can write an offer, move into the home, and they can move on to the next deal. I think that is a big mistake.

You may still wind up buying the first home you see, but I think it is still very important to compare that first home to other homes. In my 16 years as a Realtor, I have seen many people fall in love with the first home they see and I always encourage them to continue looking at other homes.

You need to compare that property to the others to see what you will get in terms of amenities, size, and finishes. You also need to pay attention to the location. Many buyers tend to overlook these factors, especially when they are buying a new construction home. There is something appealing about the fact that no one else has lived in the property, which makes it easy for buyers to fall in love with new homes.

You need to compare the first home you see to other properties.

When that happens, you may not notice that the backyard is not conducive to your family’s needs. You may also overlook the fact that the property backs up onto a busy street, which will be a hindrance when it comes time for you to sell the home. New construction buyers don’t look at properties this way, and they should.

Even if you are buying an older home, you still need to compare the first property you see to other homes available on the market. You may really like the first home only to discover that, for $10,000 more, you can get the perfect home for you and your family.

That said, you can take things too far by looking at too many homes and getting confused about what you want. I’m not saying to go out and look at dozens of homes; just look at a few others. This is probably the biggest investment you will make in your lifetime, so you want to make sure you choose the right property and avoid buyer’s remorse.

If you have any questions about finding the right home or about real estate in general, give me a call or send me an email. I would be happy to help you!